Milk processor caught abusing drought levy

Milk processor caught abusing drought levy

Senator Susan McDonald has called in the Australian Competition and Consumer Commission over the abuse of the milk drought levy by processor Lactalis.

Senator Susan McDonald has called in the Australian Competition and Consumer Commission over the abuse of the milk drought levy by processor Lactalis.

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The ACCC has been called in after processor Lactalis was caught including the drought levy as part of the minimum price paid to farmers for their milk.

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MAJOR Queensland milk processor Lactalis has been caught ripping off farmers, including the additional 10 cents a litre drought levy as part of its minimum price paid to Queensland dairy farmers, rather than adding it on.

Queensland Senator Susan McDonald said to make matters worse, Lactalis was offering farmers less than the full costs of production and paying at least 6c/litre less than the Queensland Dairy Accounting Scheme's calculated costs.

Ms McDonald said the issue would be referred to the Australian Competition and Consumer Commission.

Comment has been sought from Lactalis.

"What's worse is that it appears Lactalis is not only paying less than the cost of production, but are including the additional drought levy as part of that minimum price they're offering farmers," Ms McDonald said.

"This blatantly disregards the purpose of the payment as an extra levy given exorbitantly high production prices during drought."

Ms McDonald said Lactalis had also unreasonably pressured farmers into accepting the lowball offer before January 1, which is when the Mandatory Dairy Code of Conduct will come into effect.

"These producers have deliberately been deprived of the new protections offered by the Coalition government's new dairy code, and it's shameful," she said.

Ms McDonald also took aim at supermarket giants Coles, Woolworths and Aldi for turning a blind eye to the conduct of their milk suppliers.

"Supermarket executives told me in a Senate hearing this month they had received assurances from processors that prices offered to Queensland farmers were above the costs of production," she said.

"But after examining the situation, I believe the supermarkets are not exercising due diligence in ensuring the ethical sourcing of their milk."

Ms McDonald said it had been tough for eight years since the supermarket milk price wars started, but drought had added to the pain, forcing Queensland dairy farmers to buy feed which has dramatically increased their costs, as well as going into debt.

"I can't begin to explain the anger I have felt as I speak to dairy farmers in tears at the prospect of losing the only life they've ever known," she said.

"This is not just about price, it is about ensuring the survival of a part of the agricultural industry that Australians value and want to continue."

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